The Easter Raider

Where will Boris Jordan take NTV?

And the winner is: Gazprom. On Apr. 14, clean-cut security men took command of the Moscow headquarters of NTV, Russia's sole independent national television station. Entry was barred to journalists who refused to pledge loyalty to the new management installed 11 days earlier by the state-controlled energy giant. But the Russian people may be the losers. NTV founder Vladimir Gusinsky, who has been battling Gazprom for control of the television station for more than a year, now says he is ready to sell his 49% stake and exit NTV altogether. Expressing dismay at the lockout, American media mogul Ted Turner says he is reevaluating plans to make a strategic investment in NTV. Nor is there any immediate prospect of another Western investor appearing. Even if NTV survives, there will be no nationwide television outlet in Russia free of state control.

The principal combatants in this high-stakes struggle are all Russian except for one intriguing exception: the American investment banker Boris Jordan, 34, who commanded the Apr. 14 raid. After Gazprom, a 46% shareholder in NTV, took control of the broadcaster at the Apr. 3 board meeting, the gas company named Jordan general director of the media company.

TRUE INSIDER. The grandson of advisers to the last Russian Czar, Nicholas II, Jordan has come a long way since landing a job in 1992 with Credit Suisse First Boston to work on Russian privatizations. In 1995, he helped broker the so-called loans-for-shares deals that gave a small group of Russian business titans lucrative state assets at knockdown prices. Once an idealist about post-Soviet Russia's ability to adapt rapidly to Western-style capitalism, Jordan had become an inside player in a system in which rival business clans fought for prime industrial assets and political power.

Now, Jordan is centrally involved in the making of a new media industry controlled by the state and its proxies. The government is the largest shareholder in Gazprom, which is chaired by President Vladimir V. Putin's deputy chief of staff, Dmitry Medvedev.

Hunkered down in his quarters on the eighth floor of NTV, where he has been showering, shaving, and sleeping since his surprise Easter weekend arrival, Jordan says he will rebuild the cash-strapped network. Gusinsky, he claims, "drained the company" of its assets. His opinion: "This company was never independent. NTV was used as the political instrument and the commercial instrument of Mr. Gusinsky." Gusinsky amassed political influence and property through ties with the regime of former President Boris Yeltsin. However, NTV often attacked Yeltsin's policies, particularly the war in Chechnya. Gazprom entered the picture in an aggressive way after NTV became identified with opposition to Putin.

Politics are at the core of this drama, which has played out through dozens of raids over the last year against NTV and its parent company, Media Most, by federal tax police and prosecutors. In exile in Spain, facing federal fraud charges in Moscow, Gusinsky told BusinessWeek in an Apr. 16 telephone interview that Jordan's allegations of asset stripping at NTV are "absolute rubbish." He added: "Jordan has always cooperated with the authorities." In this case, Gusinsky views Jordan as doing the bidding of Gazprom media chief Alfred Kokh, a former state privatization chief with whom Jordan worked on loans for shares--and himself a frequent target of NTV criticism. "NTV is already a different company. I want to sell my shares," says Gusinsky.

Jordan says he wants to clean up NTV's finances and attract foreign partners to the company. His own entanglements might prove an impediment, though. Jordan is dogged by charges of mismanagement of his Sputnik venture capital fund. On Mar. 26, Sputnik was sued for breach of fiduciary duty by one of its principal investors, Faoud Said, a Geneva investor who is seeking $300 million in damages.

Jordan, it's alleged, cut investors out of the ownership loop in Sputnik-run National Timber Co. through a complex scheme of holding companies. "The conflict of interests is just mind-boggling," says Said. Jordan and Igor Akhmerov, the head of National Timber, both deny any such schemes exist. Calling Said's suit a limited contractual dispute, Jordan says the full crew of Sputnik investors, whose ranks include George Soros and Harvard Management Corp., have shown their satisfaction by putting $12 million into the fund over the last year.

Jordan had been lauded as the man who persuaded then-British Petroleum to buy a 10% stake in Sidanko in 1997, making it the first major foreign investor in the Russian oil industry. But by early 1999, BP was writing off $200 million of its $570 million investment as Sidanko spiraled into bankruptcy. Jordan, then CEO of Sidanko, says he filed for bankruptcy to protect assets which were being stripped by competing oil companies. He says the company is now "back on its feet and turning a profit."

THE BEAT GOES ON. This track record, critics say, does not bode well for the future of NTV. Meanwhile, Gazprom has already pulled the plug on two other Media Most properties in which it has a stake: the liberal daily Sevodnya and the Newsweek-backed Itogi magazine, also a frequent Kremlin critic. Putin has refrained from any public intervention in a dispute that he says is purely about business. But the law-enforcement apparatus over which he presides still grinds away: On Apr. 16, the federal tax police raided TNT, a small Gusinsky-owned television station in Moscow to which many of the NTV journalists fled after the Apr. 14 lockout.

Jordan should not be counted out--he's "the best salesman I have ever seen," says a Western financial dealmaker in Moscow. Already he has used his persuasive powers to keep popular NTV anchor Tatyana Mitkova from jumping ship. And he plans to help Gazprom sell its NTV stake once it is able to realize value for it. Still, in today's politicized climate, it will require formidable salesmanship indeed to convince the world that NTV--the N stands for nezavisimoye, the Russian word for independent--will live up to its name.

By Paul Starobin and Catherine Belton in Moscow

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